MGM Grand, Inc. (NYSE: MGG) today
reported earnings for the second quarter ended June 30, 1998 of 25 cents per
diluted share, compared with 56 cents per diluted share for the 1997 quarter.
Net income for the 1998 second quarter was $14.4 million compared with
$33.0 million in the 1997 period.
Net revenues for the three months ended June 30, 1998 were $185.4 million,
compared with $209.1 million for the same period in 1997, representing a 11%
reduction. As previously announced, the lower 1998 second quarter earnings
and net revenues were primarily a result of a lower than average table games
hold percentage at MGM Grand Las Vegas and lower earnings at the Company`s 50%
owned New York - New York Hotel/Casino. MGM Grand Las Vegas also experienced
lower casino volume in late June 1998 compared with the 1997 period which
included the June 28, 1997 Holyfield/Tyson heavyweight championship boxing
event. As a result, operating cash flow (EBITDA) for the three months ended
June 30, 1998 was $48.9 million, representing a decrease of 33% when compared
with $73.3 million in the prior year`s second quarter.
“These results obscure the fact that excluding the Holyfield/Tyson boxing
event held during June 1997, customer activity by almost any measure is ahead
of last year`s record pace. This is evidenced by higher table games volume,
hotel occupancy and restaurant and showroom attendance, while our slot volume
continues to keep pace with last year`s levels,” said Alex Yemenidjian,
President and Chief Operating Officer of MGM Grand, Inc.
“The City of Entertainment transformation at our Las Vegas property is
nearing completion and based upon the amenities already in place, has created
strong customer demand. The latest of these amenities to open include our
luxurious 28,000-square-foot spa and health club facility, our newly remodeled
buffet and our 1,100 foot river ride which completes our lavish 6.6 acre pool
and spa complex. We look forward to the opening of the MGM Grand Mansion, the
new Mansion Casino, as well as our new Sportsbook Casino, all scheduled to
open over the next several months,” said J. Terrence Lanni, Chairman and Chief
Executive Officer of MGM Grand, Inc.
On June 23, 1998, the Company announced a $35 per share cash tender offer
to purchase up to 6 million shares of the Company`s common stock as part of a
12 million share repurchase program. The offer commenced on July 2, 1998 and
expires on Friday, July 31, 1998, at 5:00 p.m., New York City time, unless
extended by MGM Grand, Inc. The tender offer is subject to various terms and
conditions as described in the offering materials distributed to Company
stockholders. It is anticipated that, depending on market conditions, the
remaining 6 million shares in the repurchase program would be acquired through
an additional tender offer or offers.